As we all know from personal pain at the pump, gasoline prices have skyrocketed and it is unclear when driving Californians will begin to see relief at the pump.  I recently spoke with a friend who lives in Florida, and the price that she pays for a gallon of gas is about 10 percent less than I do, which caused me to wonder why there would be such a disparity.  About this time I had a chat with longtime FR reader Larry Venus, who had done some research and pointed out to me that California motorists currently pay an average of 7.9 percent sales tax per gallon!
 
Well, it doesn’t take much thought to realize that if the state’s tax on gasoline is not a flat dollar amount, but rather a percentage, that the amount of taxes on $5 a gallon has is a whole lot more than taxes on a $2 gallon. 
 
Actually, getting out the FlashCalc, by my reckoning, when gas was a couple of bucks a gallon, I paid 15 cents per gallon in taxes.  Using a $5 per gallon figure for comparison (even though I am starting to forget when gas was that cheap), my tax liability per gallon is a staggering $37 cents.
 
This kind of tax is insidious, making us pay more when we can least afford it. 
 
According to some figures provided to me by Larry, in 2007, 15.8 billion gallons of gasoline were sold in California.
 
If you take into account the rise in gas prices, this would mean a windfall of over $2 billion for state government, at the expense of working, driving Californians.
 
The number could be even higher, though one would assume that there would be some drop off of driving (and gas usage) by some because of the higher prices (especially with a whopping state smack-down of $37+ cents on each gallon) — and also some people on limited incomes will purchase less other things because of gas prices, so there may be some lost state sales tax revenue as a result.
 
Still, it is very unfortunate that, in essence, the state is benefiting from higher gas prices, and driving Californians are enduring significantly higher gas costs as a result.
 
Oh well, these taxes will be a drop in the bucket as Californians get walloped with the costs associated with paying for the "anti-global warming crusade" of Governor Schwarzenegger as the staggering costs of AB 32 implementation are only now coming to light.  Based on what I have seen, his legacy will be less freedom and less liberty for the people of the Golden State, while ultimately producing such a miniscule reduction in global man-made carbon emissions (if you buy into the questionable science that such emissions are causing temperate chance).

This entry was posted on Friday, June 27th, 2008 at 12:00 am and is filed under Blog Posts.